| Case ID |
2604d2bf-61ae-4502-ad8b-44673f47929e |
| Body |
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| Case Number |
Civil Tax Reference No. 23 of 1977 |
| Decision Date |
Mar 11, 1996 |
| Hearing Date |
|
| Decision |
The Lahore High Court ruled that the remuneration foregone by the assessee after it had accrued was not admissible for tax purposes. The court found that the income had accrued prior to the decision to forego it, and therefore, it was taxable. The court emphasized that once the income is accrued, it cannot be disregarded, even if the party decides to forego it later. The reference was answered in the negative against the assessee and in favor of the department, establishing a precedent for the treatment of foregone income in tax assessments. |
| Summary |
The Lahore High Court's decision in the Civil Tax Reference No. 23 of 1977 deals with the interpretation of the Income Tax Act, 1922, specifically Section 10 regarding business expenditures. The case revolves around the issue of whether remuneration that had accrued but was subsequently foregone by the managing agents of Pak Cement Industries could be considered admissible for tax purposes. The court determined that once the remuneration had accrued, it could not be legally disregarded, thus setting a significant precedent for future tax assessments involving foregone income. This case highlights the importance of recognizing accrued income in tax law and the implications for management decisions regarding remuneration. Keywords: Income Tax Act, business expenditure, Lahore High Court, tax assessments, accrued income. |
| Court |
Lahore High Court
|
| Entities Involved |
Pak Cement Industries
|
| Judges |
MALIK MUHAMMAD QAYYUM,
AHMAD SAEED AWAN
|
| Lawyers |
Muhammad Ilyas Khan for Petitioner,
Hamid Shabbir on behalf of Raza Karim for Respondent
|
| Petitioners |
COMMISSIONER OF INCOME TAX, RAWALPINDI
|
| Respondents |
PAK. MINERAL INDUSTRIES LTD., RAWALPINDI
|
| Citations |
1996 SLD 98,
1996 PTD 1108,
(1995) 73 TAX 240
|
| Other Citations |
(1960) 2 Taxation 207,
(1962) 2 Taxation 293,
Morvi Industries Ltd. v. Commissioner of Income Tax, Central Calcutta (Taxation India, September, 1964, p. 37)
|
| Laws Involved |
Income Tax Act, 1922
|
| Sections |
10
|